UPDATE: J.P. Morgan Downgrades AMR on Lack of Upside Potential

In a report published Wednesday, J.P. Morgan analyst Jamie Baker downgraded the rating on AMR (OTC: AAMRQ) from Overweight to Neutral, but raised the price target from $9.50 to $10.50.

In the report, J.P. Morgan noted, “Settlement momentum allows us to boost our AMR-LCC merger probability to the 70-75% range, from last month's 60% level. According to our otherwise-unchanged analysis, this supports a revised fair value of $10.50 for AAMRQ, assuming deal/no-deal goal posts of $13.00/$3.50. Given the paucity of forecasted upside potential from current levels, the economic uncertainty associated with settlement concessions, and lack of downside clarity, our earlier Overweight rating drops to Neutral.”